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UK infrastructure plagued by 'poor decisions and short-termism'

Dom Browne

06 February 2018

A leading think tank has criticised the UK's approach to infrastructure investment and delivery, stating it 'consistently makes poor decisions' and is short sighted.

Developed over a year, the latest infrastructure report from the Institute for Government explores how the UK can improve infrastructure policymaking in areas including transport, energy, flood defences, digital communication, waste and water.

It slams the Government for not having a long-term approach to infrastructure and for failing to make timely decisions or engage effectively with the public to address concerns, as well having a poor approach to capital investment.

It provides a list of recommendations covering key areas such as time, quality and cost.

Recommendations:

Time

1) The Government must strengthen the National Infrastructure Commission (NIC).

The report calls for the NIC to be given greater independence as an executive non-departmental public body, have a more diverse array of professions and backgrounds in its commissioners, engage the public more widely and have its remit extended to housing.

The report states that the UK should learn Learning from France’s Commission Nationale du Débat Public (CNDP) and create a Commission for Public Engagement as a cost-effective way of giving 'local communities a genuine opportunity to shape infrastructure decisions, helping to deliver major projects faster and more efficiently'.

Quality

3) The Government needs a cross-government infrastructure strategy.

This would articulate a vision for how the policies and projects of individual departments interact to achieve infrastructure objectives and explain how the capacity of sub-national authorities will be built.

'To help develop the strategy and monitor its implementation, the Government should reinstate the position of Commercial Secretary to the Treasury,' the report states.

4) The Government must improve cost benefit analysis.

update cost benefit analysis so that it can better capture the ‘dynamic effects’ of projects

improve the accuracy of project cost and time estimates

take a more consistent approach to assessing projects

communicate cost benefit analysis results within Whitehall and to the public better.

5) Parliament must scrutinise infrastructure decisions made by the Government better.

In the House of Commons, the Treasury Committee should lead this, working closely with other relevant committees. In the House of Lords, a new infrastructure committee should be established, initially for a year.

7) The Government must improve its approach to accounting, appraisal and budgeting

'Government must not let arbitrary accounting rules and narrow fiscal targets drive financing decisions, it must implement a more robust appraisal process and it must change the way that the Treasury handles capital investment.'

8) The Government needs to up its game in terms of private finance

The Government must ensure that civil servants have access to sufficient in-house commercial skills.

Ministers need to understand investor perspectives better before making policy.

And the Infrastructure and Projects Authority must outline a clear infrastructure project pipeline that provides investors with clarity on which projects will require private finance, how much investment is needed, and how the deals will be structured.